Principles of conflict economics

Cover......Page 1
Half-title......Page 3
Title......Page 5
Copyright......Page 6
Contents......Page 9
Figures......Page 13
Tables......Page 19
Preface......Page 21
1.1. What Is Conflict Economics?......Page 25
Macro Conflict......Page 26
Micro Conflict......Page 31
Conflict and Economics......Page 34
Rationality and Equilibrium......Page 35
Multidisciplinary Nature of Conflict Economics......Page 36
1.5. Bibliographic Notes......Page 37
Production Function......Page 39
Production Possibilities Frontier......Page 41
Specialization and Trade in the Production Possibilities Model......Page 43
Economic Costs of Conflict......Page 45
Defense Spending and Economic Growth......Page 47
North Korea......Page 48
2.3. Bibliographic Notes......Page 51
Preferences......Page 52
Indifference Curves......Page 53
Utility Functions......Page 55
Budget Constraint......Page 56
Optimal Choice......Page 57
Change in Income......Page 58
Change in Price......Page 60
Substitution and Income Effects......Page 61
Arms and the Fungibility of Foreign Aid......Page 64
Land Mines and the Substitution Principle......Page 65
Supply and Demand......Page 67
Comparative-Static Analysis......Page 69
Difficulty of Small Arms Control......Page 70
Liberal Peace Hypothesis......Page 72
3.3. A Taxonomy of Goods......Page 74
3.4. Bibliographic Notes......Page 76
Elements of a Game......Page 77
Extensive and Normal Forms......Page 78
Solutions and Equilibriums......Page 79
4.2. Chicken and Prisoner’s Dilemma Games......Page 83
Chicken......Page 84
Prisoner’s Dilemma......Page 86
4.3. Repeated Prisoner’s Dilemma......Page 87
4.4. Bibliographic Notes......Page 90
5.1. Elements of Conflict......Page 91
Inconsistent Expectations......Page 93
Commitment Problems......Page 94
Indivisibilities......Page 95
Preemptive War......Page 96
Preventive War......Page 97
Malevolent Preferences......Page 98
Political Bias......Page 100
5.3. Third-Party Intervention......Page 102
5.4. Bibliographic Notes......Page 105
6.1. The Conflict Cycle......Page 107
Prominent Datasets......Page 109
Measures of Interstate Conflict......Page 110
6.3. Hirshleifer’s Bargaining Model and Interstate War......Page 111
Territory......Page 116
Economic Interdependence......Page 118
Economic Development......Page 121
Duration......Page 122
Third-Party Intervention......Page 123
Economic Costs of World War I......Page 124
6.5. Bibliographic Notes......Page 125
7.1. Definitions......Page 128
Prominent Datasets......Page 129
Measures of Armed Civil Conflicts......Page 131
Genocides and Politicides......Page 136
Weak State Conditions......Page 137
Opportunistic Rebel Leaders and the Business of Rebellion......Page 138
Economically Viable Rebellion......Page 139
Changes in Revenues and Costs of Rebellion......Page 140
Greed, Grievance, and Weak States......Page 142
Economic Interdependence......Page 143
Genocide and Politicide......Page 144
Duration......Page 145
Third-Party Intervention......Page 146
Microlevel Costs......Page 147
7.5. Bibliographic Notes......Page 148
8.1. Defining Terrorism......Page 150
Measures of Terrorism......Page 151
Basic Model......Page 156
Terrorist Access to Income......Page 158
Terrorist Response to Price Changes......Page 159
Terrorist Substitution Possibilities......Page 160
Preference Policies......Page 162
Hostage Game between a Government and Terrorists......Page 163
Counterterrorism Games between Governments......Page 166
Conventional Terrorism......Page 170
Suicide Attacks......Page 172
Terrorism and Economic Growth......Page 176
8.6. Bibliographic Notes......Page 177
Basic Model......Page 179
Defensive and Offensive Military Innovations......Page 182
Military Bases......Page 184
Buffer Zones and Peacekeeping Forces......Page 186
Strategic Depth......Page 187
9.2. O’Sullivan’s Three-Dimensional Model of Spatial Conflict......Page 188
Pyramid Model of the Distribution of Military Power......Page 189
Territorial Conflict......Page 191
Basic Lanchester Model of War Attrition......Page 192
Lanchester Attack/Defend Model......Page 193
Egypt-Israel 1967 War......Page 196
Militarization of Space......Page 197
9.4. Number and Size of Nations......Page 198
The Alesina-Spolaore Model......Page 199
Risk of International Conflict......Page 201
Information Technologies and the Emergence of Trans-State Groups......Page 202
Determinants of Secession......Page 203
Offense-Defense Theory and Evidence......Page 205
9.6. Bibliographic Notes......Page 207
10.1. Definitions......Page 209
Arms Rivalry......Page 210
Proliferation......Page 213
Arms Control......Page 216
10.3. The Richardson Arms Race Model......Page 221
Reaction Functions and Equilibrium......Page 223
Numerical Examples......Page 224
Deterrence and Attack Conditions......Page 226
Iranian Nuclear Weapons Proliferation......Page 229
Antiballistic Missile Technology in Europe......Page 230
Inherent Propensity toward War in the I-B Model......Page 232
Optimal Allocation of Resources to Military and Civilian Goods......Page 234
Reaction Functions and Arms Rivalry Equilibrium......Page 236
Economic Strength and Arms Rivalry Competitiveness......Page 237
Arms Control......Page 238
Structure of Arms Rivalries......Page 241
Arms Rivalry and the Risk of War......Page 242
Determinants of Nuclear Weapons Proliferation......Page 243
10.7. Bibliographic Notes......Page 244
11 Military Alliances......Page 246
11.1. Definitions......Page 247
11.2. Patterns of Interstate Alliances......Page 250
Optimization......Page 253
Reaction Functions and Alliance Equilibrium......Page 256
Alliance Suboptimality......Page 257
Disproportionate Burden Sharing......Page 259
Optimal Alliance Size......Page 260
Pure Public, Impure Public, and Private Goods......Page 261
Technology of Public Supply and the Joint Product Model......Page 262
Implications......Page 263
Burden Sharing within NATO......Page 264
Alliances and the Risk of Armed Conflict......Page 267
11.6. Bibliographic Notes......Page 268
12.1. Conflict Success Functions......Page 270
Basic Model of Resource Conflict......Page 273
Optimization Problem......Page 274
Reaction Functions and Equilibrium......Page 275
Numerical Example......Page 276
Paradox of Power and the Irrelevance of Initial Resource Holdings......Page 277
Settlement Opportunities in the Resource Conflict Model......Page 278
Production Possibilities and Autarky Equilibrium......Page 280
Gains from Trade......Page 281
Insecure Resources and Dissipation of the Production/Exchange Economy......Page 284
Diversion......Page 285
Appropriation Possibilities and Equilibrium in a Production/Exchange Economy......Page 287
A Predator/Prey Model of Appropriation, Production, and Exchange......Page 288
Discussion......Page 290
12.4. Bibliographic Notes......Page 291
A.1. Populations and Samples......Page 293
A.2. Probability and Sampling......Page 294
A.4. Statistical Inference......Page 296
A.5. Regression Analysis......Page 298
Net Resource Functions under Fighting......Page 301
Reaction Functions and Fighting Equilibrium......Page 302
Reaction Functions and Settlement Equilibrium......Page 303
Inconsistent Expectations......Page 304
Preemption......Page 305
Preventive War......Page 306
References......Page 309
Author Index......Page 331
Subject Index......Page 339